CFOs and CHROs: better decisions through collaboration

A largely untapped C-level relationship is on the rise: CFOs and CHROs working together. This upward trending collaboration is based on individual capabilities that, when shared and combined, foster greater gains and inform engagement. Leading CFOs are on the forefront of this partnership with human resources as a way to stay informed of the entire business picture, including benefits, employee retention plans and attracting qualified talent.

Drivers and benefits

The CFO and CHRO firmly understand that people are the greatest asset and expense of any business. As one of the key assets of a company, the people have to enable the business. And like any investment, they need to have a sound return.

It’s no secret that attracting, developing and retaining the right employees remains a major challenge. And that won’t change, particularly in our increasingly global talent pool. Meeting that challenge can be done more adeptly by introducing some key abilities best found in the finance function: a deep experience and knowledge of implementing data analytics.

CFOs recognize that they can drive organizational performance by lending their expertise to the HR function. Chiefly, the CHRO can derive value from leveraging the CFO’s understanding of data and how it drives business, as well as how properly utilizing data leads to better decision-making and business performance.

The CFO and HR: workforce analytics

EY professionals explain how the CFO and chief HR officer can drive better organizational performance by collaborating on workforce analytics. [See a transcript of this video]

Acquiring data is one thing; properly filtering and utilizing it is another. Enter data analytics, the process of deciphering and gaining advantage through analyzing data. Working with the HR function, CFOs help CHROs extract the most value from HR data to drive business performance. For example, it can help to how organizational changes impact employee satisfaction, and how this affects attrition rate. It can also identify recruitment pools and help address skills gaps.

Improved decisions can result from the application of data analytics. But by combining CHRO insight with CFO know-how, the quality of business decisions can rise to another level.

For instance, companies that use data analytics get better financial results through the use of predictive modeling and improved predictability in areas such as recruiting, sourcing and on-boarding talent.

EY’s survey, Partnering for performance Part 2, shows that in companies where the CFO and CHRO work closely together, there are clear business benefits. Findings showed both stronger growth and productivity. On average, there’s a 10% increase in EBITDA.

Findings indicate that partnership between the CFO and CHRO fosters an improvement in:

Top-line growth

Productivity

Employee morale

Employee engagement

Increasingly, HR components are becoming key elements of business dashboards. Most surprising from our survey is that 80% of respondents indicated an increased collaboration between the CFO and CHRO over the last three years.

But it’s not just that there’s more collaboration recently; there’s a direct correlation with company performance. High-performing companies demonstrated a greater degree of collaboration. Low-performing organizations, however, exhibited significantly less. It’s markedly clear for CFOs how much collaboration with the CHRO can substantially improve business results.

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